MTA board reduces fare hikes

May 11, 2009 3:42:45 PM PDT

ALBANY, NY --

New York's mass transit agency voted to raise fares and tolls by 10 percent Monday after the state Legislature approved a $2.26 billion bailout to avert higher fare increases and deep service cuts. But advocates warned that because the bailout of the Metropolitan Transportation Authority neglects long-term planning, the MTA will have to go back to lawmakers for more cash to keep the system running smoothly.

"It's very hard to plan without knowing how much capital resources you're going to have in the future," said Richard Ravitch, the former MTA chairman who headed a commission that drafted an earlier version of the bailout plan. "Hopefully the Legislature will come back in a year or two and address it."

Under the plan adopted by the MTA board on an 11-2 vote, the base subway fare will rise from $2 to $2.25 next month, and the cost of a monthly subway and bus pass will rise from $81 to $89. Tickets on the Long Island Rail Road and Metro-North Railroad will increase between 9.75 percent and 10.75 percent, and tolls on MTA bridges and tunnels will increase by about 10 percent.

The fare hikes amount to slightly less than half of the increases the board passed in March when it was still waiting for the Legislature to agree on a bailout plan.

That so-called "doomsday" plan was intended to close a budget gap that officials blamed on declining revenues from real estate taxes and on rising debt service payments.

Under the earlier plan, the base subway fare would have gone up to $2.50 and fares would have risen an average of 23 percent throughout the system.

"Some may not be happy about it," he said. "Some think it's too little, too late, and some think it's too much too soon, as we'll be asking our customers for an increase when we're in a recession. ... I think all of them are right. It is what it is."

The MTA bailout that the Legislature passed last week raises $1.5 billion from a payroll tax on employers in 12 counties - New York City's five plus seven surrounding counties.

Of that money, $400 million will be collateral so the state can borrow bonds over the next two years for its capital plan.

But advocates said the agency needs money for a five-year capital plan to pay for station renovations, track repairs and new projects like the long-planned Second Avenue subway line.

"In reaching a political deal, the capital plan was cut short from five to two years," said Dick Dadey, executive director of Citizens Union. "It disempowers the agency from being able to plan effectively."

William Henderson, executive director of the MTA's Permanent Citizens Advisory Committee, said lawmakers seem to be counting on the economy rebounding enough in two years that the money will be there for capital projects.

"People are hanging their hats on the economy improving," he said. "That's a big jump."

The MTA board will vote later this month to take back the service cuts it approved at its March 25 meeting, including eliminating some bus lines and subway routes.

No routes will be cut and no layoffs are anticipated under the new plan, but some positions will be eliminated through attrition.

Transit workers warned that even those job losses would be felt by the public, especially if subway stations are left unstaffed at night.

"Riders need us in the stations and we should be there for them," said Kendra Hill, a station agent who addressed board members.

The meeting was a farewell for Elliot Sander, the MTA's chief executive since 2007, who submitted his resignation last week after the Legislature adopted the financing plan.

The jobs of Sander and Hemmerdinger were combined and restructured as part of the financing plan.

Hemmerdinger said he did not expect to stay on as chairman.

"He's leaving and the odds are I am too, but who knows?" he said after the meeting.